Impact of new motorway on housing prices in rural North-East Slovenia

Abstract

The literature generally agrees that improved accessibility has a positive effect on housing values. The motorway constructions in north-eastern Slovenia, completed between 2002 and 2018, significantly improved the accessibility of less developed areas. In this article, we examine how the new motorway has affected the housing values in the mostly rural north-eastern part of Slovenia. We analysed the distance decay effect of amenities and disamenities of motorway links and ramps as well as bus stops, train stations, and railway links on housing prices. In addition to the transport infrastructure variables, we analysed numerous other structural and environmental variables. We estimated three different spatial hedonic regression models: the spatial autoregression model, the spatial error model, and the spatial autocorrelation model.The results indicate that none of proximities to the bus stop, train station, or motorway link have had a significant effect on housing value. However, the rail track proximity exhibited a significant negative association with price. Furthermore, the effect of distance to the nearest motorway ramp on housing value is significant: it is stronger for closer distances (i.e. starting from 500 m) and decreases up to 6 km, while the effect of distances below 500 m is insignificant. Our results also show that bigger dwellings, more rooms, and the presence of a balcony, elevator, central auto heating system, new installation, and air conditioning as well as an apartment in a single house, are associated with a higher housing price. On the contrary, selling the dwellings together with a parking place and basement reduced the average price of the housing property. Comparing our results to the literature, we proved our hypothesis that the negative effect of a motorway is less pronounced in rural areas compared to urban areas and that the positive effect of accessibility is stronger in rural areas and extends over a wider geographical area.